LG Innotek (011070) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue was ₩6,626.8 billion, down 12.3% year-over-year but up 16.6% sequentially from Q3 2024.

• Full-year 2024 revenue increased 3% year-over-year to ₩21,200,755 million, driven by growth in optical solutions and substrate businesses.

• Q4 2024 operating income reached ₩247.9 billion, a 48.8% decrease year-over-year but a 90.1% increase sequentially; full-year operating income declined 15% year-over-year to ₩706,043 million.

• Net income for Q4 2024 was ₩106.9 billion, down 69.5% year-over-year but up 1.8% from Q3 2024; full-year net income attributable to shareholders was ₩449,274 million, down from ₩565,201 million in the prior year.

• The company maintained a strong liquidity position with ₩1,329,386 million in cash and equivalents at year-end.

Financial highlights

• Q4 2024 EBITDA was ₩561.0 billion, down from ₩810.8 billion in Q4 2023 but up from ₩458.0 billion in Q3 2024.

• Operating margin improved to 3.7% in Q4 2024 from 2.3% in Q3 2024, but declined from 6.4% in Q4 2023; full-year gross margin decreased to 8.2% from 9.0% year-over-year.

• CAPEX for Q4 2024 was ₩181.1 billion, down from ₩373.6 billion in Q4 2023; full-year capital expenditures were ₩716,965 million, focused on capacity expansion.

• EPS (basic) for the year was ₩18,985 (2023: ₩23,884); dividend per share was ₩2,090 (payout ratio 11.0%).

• Operating cash flow for the year was ₩1,110,059 million; free cash flow impacted by continued investment.

Outlook and guidance

• Q1 2025 expected to see seasonal sales decline in optical and substrate segments, with gradual improvement in automotive camera demand.

• Display substrate demand is expected to recover, while automotive segment faces continued weak demand.

• Management anticipates stable demand for premium mobile, display, and automotive components, with a focus on cost control and expansion in mobility and robotics.

• Plans to increase dividend payout ratio to 15% by 2027 and 20% by 2030.